NRMA’s present high-profile problems aren’t doing much to bolster consumer confidence in the general insurance industry. Although it’s completely unfair to do so, some media commentators are now linking NRMA’s trouble at the top and HIH’s collapse.

The number 1 insurer’s AA+ credit rating has been placed on creditwatch, with negative implications by Standard & Poor’s, which cited “the recent instability in management hierarchy” as a major factor in the decision.

S & P’s said the instability comes on top of business and geographical diversification of the NRMA Group, as well as balance sheet restructuring. This places “some uncertainty on NRMA’s future strategic direction”. S & P’s Associate Director Michael Vine said the creditwatch action also reflects “intensified industry risk affecting the Australian general insurance industry”.

“However, NRMA’s capitalisation remains very strong and the provisions for the company’s outstanding claims are soundly and conservatively based.”

Stand-in CEO Ian Brown has confirmed that the sacking of Eric Dodd wasn’t based on his performance – a statement likely to improve Mr Dodd’s chances of a substantial severance payout.

Mr Brown was reported by the Australian Financial Review as saying the NRMA board was happy with Mr Dodd’s performance, but wanted a “cleanout” after the resignation of Chairman Nick Whitlam.